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Data and oil: which one is stronger?

Data and oil: which one is stronger?

Sunday 20, 10 2019
Both data and oil are important factors affecting the global situation. Which one is stronger?
The 1970s was a time with the most intense debates in the international community regarding ownership of natural resources. Discussions focused on management methods and institutions that can affect their prices and supplies, strategic routes of resource transport as well as their final destinations.
Oil is also on the list of important resources mentioned above. Being the main fuel for industrialization in the 20th century, it also brought instability and geopolitical risks.

Over time, the international order had self-regulated – although this was not always effective. The United Nations had passed a resolution guaranteeing the rights of states to their resources. That is the new International Economic Order (NIEO): large organizations such as the Organization of Petroleum Exporting Countries (OPEC) became a voice in negotiating prices, shipping routes were protected under international maritime law.
Oil management has always been a controversial issue. Like today's data, oil is an important input in the economy, in the military, in strategy and the cause of prolonged tensions in international politics. Data or oil management all lead to problems such as ownership, economic growth, and national security.

However, these characteristics are not always considered to be an accurate model for policymaking. As the debate over transnational data flows continues to increase bilateral and multilateral tensions, it is important to realize that the importance of data is not inferior to oil, but their role is very different.
The first difference is about national security. Unlike oil, data streams create a large source of information that provides details about interests, habits, and behaviors at both a personal and community level. For centuries, such types of information have been considered a necessary source for intelligence gathering and management. Even today it embodies the power of each nation.

Next is the economy. Unlike tangible materials, the value of the data does not necessarily come from sources such as oil, but they may come from transportation: the data streams provide support information for new products, business practices and industries.
Indeed, data has created much more value in the global economy than in conventional goods and services. On the other hand, systems for managing goods, services, and capital are built to provide the bulk of the benefits to the Western economy.
While developing countries have benefited from the opening of factories in the indigenous areas of foreign manufacturing enterprises, the added value from investment, royalties, etc. has been almost captured by the West.

If developing countries do not act quickly, the process of digital globalization will lead to similar results. For a large number of internet users, simply restricting the flow of data is not enough to address the challenges.
Personal information and related data are not things that can be freely exchanged. Specific conditions are needed to prioritize equitable development as well as to bring about economic efficiency.

The last factor to consider is politics. Many argue that data should not be considered as a resource or a commodity. Instead, it should be considered as the sole and exclusive property of each individual. Data cannot also be extracted in isolation from humans as it is the result of digitized interactions between people and technology.
There is a need for the liberalization of the flow of data streams. However, this process cannot be carried out unilaterally, but globally. Transnational data flows are contributing to structural changes in the global economy. Unless there are supporting rules and institutions, the benefits of this data will still be distributed unequally and create inequality. 
Source: CafeF
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Financial News

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